World Commerce Online Files For Chapter 11 Protection

Inside Money

August 21, 2001|By Jerry W. Jackson, Sentinel Staff Writer

World Commerce Online, one of Central Florida's early experimenters with Internet-based electronic commerce in the 1990s, on Monday filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.

The company, which never earned a profit and earlier this year slashed its staff by more than 40 percent and reshuffled management, was unable to generate enough cash from operations to keep the business going, company officials said.

The dot-com bust of the past year and the dearth of venture capital financing in the past six months left the company unable to attract new money, despite a change in business strategy and new leadership.

The company, founded in 1994, burned through more than $50 million in start-up venture capital since 1998 and found additional sources "essentially dried up," said Mark Patten, chief financial officer.

"You had the inevitable staring at you," Patten said.

Joseph Dugan, president and chief executive officer, said the company hopes to present a reorganization plan by early fall that will allow the business to continue operating while making "full or partial repayment" of debts to creditors.

"It is the goal of World Commerce Online to emerge from Chapter 11 as a financially stable and operationally sound organization," Dugan said in a statement.

The company, which started out building online trading markets for the cut flower and perishables industries, later focused on providing Web-based technology to individual companies.

While the company still has about 100 employees -- about 80 in Orlando and 20 in Holland -- down from about 180 earlier this year, chances are that more cuts will have to be made, Patten said.

"It's very difficult in our circumstances to maintain the staff we have today. But we're still looking at that," Patten said. "We expect we'll be receiving guidance from the court on that."

The company, which has its headquarters near Orlando International Airport, listed total assets of $22.6 million as of June 30, and total debt of $41.5 million.

The single largest creditor, both secured and unsecured, is Interprise Technology Partners LP, a Miami-based venture-capital firm that provided most of World Commerce Online's early financing. Interprise holds about 58 percent of World Commerce stock on a converted basis -- warrants, preferred and common stock.

World Commerce stock, hammered in the past year by continuing losses, gave up most of its remaining value Monday, plunging 76 percent to close at 1 cent a share in over-the-counter Bulletin Board trading.